Correlation Between GM and 1919 Maryland
Can any of the company-specific risk be diversified away by investing in both GM and 1919 Maryland at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GM and 1919 Maryland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and 1919 Maryland Tax Free, you can compare the effects of market volatilities on GM and 1919 Maryland and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GM with a short position of 1919 Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 1919 Maryland.
Diversification Opportunities for GM and 1919 Maryland
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and 1919 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and 1919 Maryland Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1919 Maryland Tax and GM is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on General Motors are associated (or correlated) with 1919 Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1919 Maryland Tax has no effect on the direction of GM i.e., GM and 1919 Maryland go up and down completely randomly.
Pair Corralation between GM and 1919 Maryland
If you would invest 4,321 in General Motors on February 20, 2024 and sell it today you would earn a total of 255.00 from holding General Motors or generate 5.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
General Motors vs. 1919 Maryland Tax Free
Performance |
Timeline |
General Motors |
1919 Maryland Tax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and 1919 Maryland Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and 1919 Maryland
The main advantage of trading using opposite GM and 1919 Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 1919 Maryland can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 1919 Maryland will offset losses from the drop in 1919 Maryland's long position.The idea behind General Motors and 1919 Maryland Tax Free pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.1919 Maryland vs. Touchstone Ultra Short | 1919 Maryland vs. Aqr Long Short Equity | 1919 Maryland vs. Astor Longshort Fund | 1919 Maryland vs. Ultra Short Fixed Income |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Global Correlations Find global opportunities by holding instruments from different markets |